Appointed by Attorney General John Ashcroft to be Special Master of the fund, Feinberg worked for 33 months entirely pro bono. He developed the regulations governing the administration of the fund and administered all aspects of the program, including evaluating applications, determining appropriate compensation and disseminating awards.

In his book titled What is Life Worth?, Feinberg described the eight-part plan which was applied to approaching the September 11th Victim Compensation Fund. (i) Identifying someone with sufficient and exceptionally broad experience is mass tort action mediation, litigation, and settlement, which Feinberg possessed through his previous personal experience as a political activist and his work in the Agent Orange compensation settlement. (ii) To support and follow the unprecedented law of Congress for the proportional compensation of victims based on estimated loss from future earnings as a key legislated criterion. Hire a full staff of accountants and attorneys to track and service each claim individually. (iii) Accumulate all the reports and applications, along with counter-claims to gauge and initiate the direct compensation process. How the compensation fund worked was in detail substantially different than the Agent Orange mass tort litigation case. (iv) The place of informed discretion in compensating claimants under the formula of keeping the domain of compensation (p47 of Feinberg's book) under the rule of thumb that 85% of the money should not go to 15% of the 'richest' claimant families, under the principle of "narrow the gap" between the largest and the smallest compensations paid to claimants. (v) With a mind to the future, the process of the program should be maintained and serviced as a precedent for future courts to defend in future compensation cases as needed. The actions taken should be uniform in their approach. (vi) There would be "no substitute for hard work and legal craftsmanship" of rigorous intellectual honesty. (vii) The support of Edward Kennedy would be recognized throughout the process whom Feinberg knew since 1975 (p7-8). (viii) Law suits were to be discouraged as contrary to the spirit of an enacted Law of Congress legislated to expedite the claim process of victims of September 11.[7]

Early in the process he was described as aloof and arrogant. Feinberg was subjected to some very public criticism at meetings, in the media and on Web sites.[8] "I underestimated the emotion of this at the beginning", Feinberg has said. "I didn't fully appreciate how soon this program had been established after 9/11, so there was a certain degree of unanticipated anger directed at me that I should have been more attuned to."[9]

It was up to Feinberg to make the decisions on how much each family of a 9/11 victim would receive. Feinberg had to estimate how much each victim would have earned in a full lifetime. If a family accepted the offer, it was not possible to appeal. Families unhappy with the offer were able to appeal in a nonadversarial, informal hearing to present their case however they wanted. Feinberg personally presided over more than 900 of the 1,600 hearings. At the end of the process, $7 billion was awarded to 97 percent of the families.

"It's a brutal, sort of cold, thing to do. Anybody who looks at this program and expects that by cutting a U.S. Treasury check, you are going to make 9/11 families happy, is vastly misunderstanding what's going on with this program," said Feinberg. "There is not one family member I've met who wouldn't gladly give back the check, or, in many cases, their own lives to have that loved one back. 'Happy' never enters into this equation."[9]

Feinberg was able to change the mind of some of his harshest critics. Charles Wolf, whose wife died in the north tower, renamed his highly critical Web site called "Fix the Fund" to "The Fund is Fixed!". At first he called Feinberg "patronizing, manipulative and at times, even cruel." He later remarked, "To have one of your sharpest critics follow through on a promise and not only join the program he was criticizing, but promote it to his peers, says a lot about you and the way you have adjusted both the program and your attitude...Today, I have complete faith in you."

In 2005 his book, titled What is Life Worth?: The Unprecedented Effort to Compensate the Victims of 9/11 was published.

Feinberg wrote that a widow of one firefighter cursed him "I spit on you, and your children." for being unfair in his compensation awards .[10]

On July 5, 2007, it was announced that Feinberg would work pro bono as the chief administrator to the Hokie Spirit Memorial Fund (HSMF). The HSMF was set up by the Virginia Tech Foundation in the aftermath of the April 16, 2007, shooting attacks on the Virginia Tech campus. Feinberg and the university plan to disseminate a set of proposals for comment about distributions to the families in mid-July. The victims or families will have options on the ultimate uses of the funds. Payments would be completed sometime during the fall.[11]

On June 10, 2009, Feinberg was appointed by the U.S. Treasury Department to oversee the compensation of top executives at companies which have received federal bailout assistance.[12] As part of his policies, he has suggested to many bank executives that they emphasize long-term stock compensation rather than cash payments.[13]

Treasury Secretary Timothy Geithner, in a statement about Feinberg's rulings on executive pay, said, "We all share an interest in seeing these companies return taxpayer dollars as soon as possible, and Ken today has helped bring that day a little bit closer."[14][15]

On June 16, 2010, it was reported that Feinberg was to run a $20 billion fund to pay claims for the BP oil spill.[16] President Obama said that the $20 billion from BP "will not be controlled by either BP or by the government. It will be put in an escrow account administered by an impartial, independent third party." Obama said he and BP's chairman, Carl-Henric Svanberg, agreed on having Feinberg administer the fund.[17] Feinberg was also selected by Obama to oversee the compensation of top executives at bailed out banks.

BP is agreed to pay Feinberg's six-lawyer Washington, D.C., firm, Feinberg Rozen, a flat fee of $1,250,000 a month for labor and overhead costs, but the full details of compensation are unknown.[18] Feinberg has come under harsh criticism[19][20] from public interest groups for refusing to disclose the amount of his compensation or the details of his arrangement with the company.[21]

On December 6, 2010, the Center for Justice & Democracy (CJ&D) sent a letter[22] to Robert Dudley, the CEO of BP, concerning "serious new issues raised about the lack of transparency and potential conflicts of interest related to the administration of the Gulf Coast Claims Facility." In the letter, CJ&D pointed out actions taken by Feinberg in the administration of the compensation fund that point to serious conflicts of interest:

Mr. Feinberg, employed by BP, has decided on his own authority that all claims recipients must release all companies who caused this disaster from any and all legal responsibility, no matter how grossly negligent they were. This sweeping release, which assigns victims' claims to BP, benefits only one actor: BP – the company that happens to pay Mr. Feinberg's salary.

In January 2011, Judge Barbier, the federal judge over the oil spill litigation, after hearing evidence and arguments of the attorneys, ruled that Kenneth Feinberg was not independent of BP and could no longer claim to be so. Feinberg had been telling victims he was their lawyer and did not answer to BP.

The letter also criticized Feinberg's lack of transparency in the matter of compensation:

Despite repeated calls for the release of documents establishing the formal relationship between BP and Feinberg Rozen, as well as its subcontractors who are reviewing and adjudicating claims, almost nothing has been publicly released. And now we learn, as reported by Reuters on November 22, 2010, that BP and Feinberg Rozen consider their arrangement 'verbal,' i.e., they have not committed to writing the firm's compensation arrangement so there can be no public examination of it. Is the public to believe that there is no paper evidence at all documenting a $10 million per year financial arrangement between BP and Feinberg Rozen? What about the contracts between BP, Feinberg Rozen and the subcontractors who are advising and adjudicating claims and also being paid directly by BP? Surely these contracts must be in writing and released. This failure to release the terms of all these financial arrangements under circumstances of tremendous historic and public significance is simply unacceptable.

On September 12, 2012, Feinberg was hired by Penn State University to aid in the settlement of dozens of personal injury claims against the institution stemming from the sex abuse scandal involving Jerry Sandusky.[23] Four months later, Feinberg said that he expected settlement discussions with 28 people to yield results within a matter of weeks.[24]

Feinberg oversaw the disbursement of donations to the injured victims and families of the deceased in the 2012 Aurora, Colorado, movie theater shooting that left 12 people dead and 70 others wounded.[25]

On April 1, 2014, General Motors announced it had retained Feinberg to handle part of its response to a widely reported product safety recall. GM said Feinberg would serve as a consultant "to explore and evaluate options in its response to families of accident victims whose vehicles are being recalled for possible ignition switch defects."[27]

The U.S. Department of the Treasury released proposed and temporary regulations to implement the Kline-Miller Multiemployer Pension Reform Act of 2014, as required by Congress. In Kline-Miller, Congress established a new process for multiemployer pension plans to propose a temporary or permanent reduction of pension benefits if the plan is projected to run out of money.[28] As part of Treasury's commitment to ensuring an open and fair process, Treasury Secretary Jacob J. Lew appointed Kenneth Feinberg as a Special Master to help provide a dedicated, impartial and informed review of applications proposing to reduce pension benefits. Feinberg will oversee Treasury's implementation of Kline-Miller, including the review of applications to determine whether they meet the requirements set by Congress. He will also ensure that affected stakeholders have a single point of contact dedicated to this process.[29][30]

In February 2016, it was announced that Feinberg would be heading up the compensation fund for Volkswagen. This fund will be established to compensate the roughly 600,000 U.S. owners of diesel vehicles whose emissions are over the legal limit.[31][32]

As a mediator, Kenneth Feinberg served as a mediator to help resolve price-fixing antitrust claims brought against a group of financial institutions. Working as the agreed-upon neutral, he helped secure comprehensive settlements in the billions of dollars, and thereafter helped to design and administer a compensation program to distribute settlement proceeds to eligible claimants.[34][35][36]

Archdiocese of New York Independent Reconciliation and Compensation Program[edit]

In 2016, the Archdiocese of New York established the Independent Reconciliation and Compensation Program run by Kenneth Feinberg. This Independent Reconciliation and Compensation Program (the "IRCP") follows in the wake of initiatives already implemented by the Archdiocese of New York (the "Archdiocese") to address the problem of sexual abuse of minors alleged against clergy of the Archdiocese The IRCP is a new program designed to compensate eligible victims of abuse. During past years, the Archdiocese has received various individual complaints alleging sexual abuse by clergy of the Archdiocese. This Protocol outlines the eligibility criteria requirements and the process for these individuals to submit and resolve claims alleging such sexual abuse. This Protocol governs only those individual claims previously submitted to the Archdiocese and will be considered Phase I of a two-phase Program.[37]